StoneCo Ltd. Files 20-F Annual Report for Fiscal Year Ended December 31, 2023

TL;DR

<b>StoneCo Ltd. has submitted its 20-F annual report detailing its 2023 fiscal year performance and corporate information.</b>

AI Summary

StoneCo Ltd. (STNE) filed a Foreign Annual Report (20-F) with the SEC on April 24, 2024. StoneCo Ltd. filed its annual report on Form 20-F for the fiscal year ended December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal executive offices are located at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1-1002, E9. StoneCo Ltd. was formerly known as DLP Payments Holdings Ltd. and changed its name on July 3, 2018. The filing includes information related to Class A and Class B common stock, as well as various hedging instruments and bond hedges.

Why It Matters

For investors and stakeholders tracking StoneCo Ltd., this filing contains several important signals. This 20-F filing provides a comprehensive overview of StoneCo Ltd.'s financial position, business operations, and risk factors for the fiscal year 2023, which is crucial for investors to assess the company's performance and outlook. The detailed information within the filing, including financial statements and disclosures, is essential for understanding the company's compliance with SEC regulations and its strategic direction in the competitive fintech market.

Risk Assessment

Risk Level: medium — StoneCo Ltd. shows moderate risk based on this filing. The filing is a standard annual report (20-F), which typically contains a broad range of information. Specific risks are not detailed in the provided header information, necessitating a review of the full document for a precise risk assessment.

Analyst Insight

Review the full 20-F filing to identify specific financial performance metrics, strategic initiatives, and risk factors disclosed by StoneCo Ltd. for the fiscal year 2023.

Key Numbers

• 2023-12-31 — Fiscal Year End (Period of report)
• 2024-04-24 — Filing Date (Date filed)
• 2018-07-03 — Name Change Date (Date of former company name change)
• 175 — Public Document Count (Number of documents in the filing)

Key Players & Entities

• StoneCo Ltd. (company) — Filer name
• DLP Payments Holdings Ltd. (company) — Former company name
• 2024-04-24 (date) — Filing date
• 2023-12-31 (date) — Fiscal year end
• Grand Cayman (location) — Business address city
• KY1-1002 (location) — Business address zip
• 7374 (industry_code) — Standard Industrial Classification
• 001-38714 (filing_number) — SEC file number

FAQ

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 20-F filing.
• 2024-04-24: Filing Date — Date the 20-F annual report was officially filed with the SEC.
• 2018-07-03: Name Change — Date StoneCo Ltd. changed its name from DLP Payments Holdings Ltd.

Key Financial Figures

• $0.000079365 — lass Class A common shares, par value US$0.000079365 per share Trading Symbol(s) STNE Na
• $4.8413 — unts into U.S. dollars using a rate of R$4.8413 to US$1.00, the commercial selling rate
• $1 — . dollars using a rate of R$4.8413 to US$1.00, the commercial selling rate for U.S
• $4.0307 — rate reported by the Central Bank was R$4.0307 per US$1.00 on December 31, 2019, which
• $1.00 — by the Central Bank was R$4.0307 per US$1.00 on December 31, 2019, which reflected a
• $5 — rate reported by the Central Bank was R$5.1967, reflecting a depreciation of 22.4
• $4 — rate reported by the Central Bank was R$4.8413, reflecting an appreciation of 7.8
• $5.227 — rs as reported by the Central Bank was R$5.227 per US$1.00. Year Period-end Average

Filing Documents

• stne-20231231.htm (20-F) — 6350KB
• exhibit11-stonecox2023agmx.htm (EX-1.1) — 389KB
• exhibit21.htm (EX-2.1) — 85KB
• exhibit410.htm (EX-4.10) — 180KB
• exhibit0801-subsidiariesof.htm (EX-8.1) — 47KB
• exhibit111-polticadeinside.htm (EX-11.1) — 96KB
• exhibit121.htm (EX-12.1) — 11KB
• exhibit122.htm (EX-12.2) — 12KB
• exhibit131.htm (EX-13.1) — 8KB
• exhibit132.htm (EX-13.2) — 7KB
• exhibit151-stonecoxconsent.htm (EX-15.1) — 3KB
• exhibit971.htm (EX-97.1) — 55KB
• stne-20231231_g1.jpg (GRAPHIC) — 22KB
• stne-20231231_g10.jpg (GRAPHIC) — 60KB
• stne-20231231_g11.jpg (GRAPHIC) — 96KB
• stne-20231231_g12.jpg (GRAPHIC) — 33KB
• stne-20231231_g13.jpg (GRAPHIC) — 30KB
• stne-20231231_g2.jpg (GRAPHIC) — 33KB
• stne-20231231_g3.jpg (GRAPHIC) — 959KB
• stne-20231231_g4.jpg (GRAPHIC) — 413KB
• stne-20231231_g5.jpg (GRAPHIC) — 243KB
• stne-20231231_g6.jpg (GRAPHIC) — 32KB
• stne-20231231_g7.jpg (GRAPHIC) — 30KB
• stne-20231231_g8.jpg (GRAPHIC) — 352KB
• stne-20231231_g9.jpg (GRAPHIC) — 23KB
• stonecopya.jpg (GRAPHIC) — 12KB
• 0001628280-24-017682.txt (&nbsp;) — 32863KB
• stne-20231231.xsd (EX-101.SCH) — 266KB
• stne-20231231_cal.xml (EX-101.CAL) — 116KB
• stne-20231231_def.xml (EX-101.DEF) — 909KB
• stne-20231231_lab.xml (EX-101.LAB) — 1712KB
• stne-20231231_pre.xml (EX-101.PRE) — 1259KB
• stne-20231231_htm.xml (XML) — 5637KB

Forward-Looking Statements

Forward-Looking Statements 13 Certain Terms and Conventions 14 PART I

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 15 A. Directors and senior management 15 B. Advisers 15 C. Auditors 15

OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 15 A. Offer statistics 15 B. Method and expected timetable 15

KEY INFORMATION

ITEM 3. KEY INFORMATION 15 A. [ Reserved] 15 B. Capitalization and indebtedness 15 C. Reasons for the offer and use of proceeds 15 D. Risk factors 15

INFORMATION ON THE COMPANY

ITEM 4. INFORMATION ON THE COMPANY 58 A. History and development of the company 58 B. Business overview 61 C. Organizational structure 94 D. Property, plant s and equipment 96

UNRESOLVED STAFF COMMENTS

ITEM 4A. UNRESOLVED STAFF COMMENTS 96

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 96 A. Operating results 97 B. Liquidity and capital resources 116 C. Research and development, patents and licenses, etc. 121 D. Trend information 121 E. Critical Accounting Estimates 121

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 125 A. Directors and senior management 125 B. Compensation 130 C. Board practices 132 D. Employees 134 E. Share ownership 135 F. Disclosure of a registrant's action to recover erroneously awarded compensation. 135

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 136 A. Major shareholders 136 B. Related party transactions 137 C. Interests of experts and counsel 139

FINANCIAL INFORMATION

ITEM 8. FINANCIAL INFORMATION 139 A. Consolidated statements and other financial information 139 B. Significant changes 141

THE OFFER AND LISTING

ITEM 9. THE OFFER AND LISTING 141 A. Offer and listing details 141 B. Plan of distribution 141 C. Markets 141 D. Selling shareholders 141 E. Dilution 141 F. Expenses of the issue 141 i

ADDITIONAL INFORMATION

ITEM 10. ADDITIONAL INFORMATION 142 A. Share capital 142 B. Memorandum and articles of association 142 C. Material contracts 161 D. Exchange controls 161 E. Taxation 162 F. Dividends and paying agents 165 G. Statement by experts 165 H. Documents on display 166 I. Subsidiary information 166 J. Annual r eport to s ecurity h olders 166

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 166

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 168 A. Debt securities 168 B. Warrants and rights 168 C. Other securities 168 D. American Depositary Shares 168 PART II

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 169 A. Defaults 169 B. Arrearages and delinquencies 169

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 169 A. Material modifications to instrument s 169 B.Material modifications to rights 169 C. Withdrawal or substitution of assets 169 D. Change in trustees or paying agents 169 E. Use of proceeds 169

CONTROLS AND PROCEDURES

ITEM 15. CONTROLS AND PROCEDURES 170 A. Disclosure controls and procedures 170 B. Management's annual report on internal control over financial reporting 171 C. Attestation report of the registered public accounting firm 171 D. Changes in internal control over financial reporting 171

RESERVED

ITEM 16. RESERVED 171

Audit committee financial expert

ITEM 16A.Audit committee financial expert 171

Code of ethics

ITEM 16B.Code of ethics 171

Principal accountant fees and services

ITEM 16C.Principal accountant fees and services 171

Exemptions from the listing standards for audit committees

ITEM 16D.Exemptions from the listing standards for audit committees 172

Purchases of equity securities by the issuer and affiliated purchasers

ITEM 16E.Purchases of equity securities by the issuer and affiliated purchasers 172

Change in registrant's certifying accountant

ITEM 16F.Change in registrant's certifying accountant 173

Corporate governance

ITEM 16G.Corporate governance 173

Mine safety disclosure

ITEM 16H. Mine safety disclosure 174

Disclosure regarding foreign jurisdictions that prevent inspections

ITEM 16I. Disclosure regarding foreign jurisdictions that prevent inspections 174

Insider t rading p olicies

ITEM 16J. Insider t rading p olicies 174

Cybersecurit y

ITEM 16K. Cybersecurit y 174 PART III

Financial statements

ITEM 17. Financial statements 175

Financial statements

ITEM 18. Financial statements 175

Exhibits

ITEM 19. Exhibits 175 Glossary of Terms 178 Index to Consolidated Financial Statements F- 2 ii Table of Contents PRESENTATION OF FINANCIAL AND OTHER INFORMATION Unless otherwise indicated or the context otherwise requires, all references in this annual report to "StoneCo" or the "Company," "we," "our," "ours," "us" or similar terms refer to StoneCo Ltd., together with its consolidated subsidiaries, and Alpha-Logo Servios de Informtica S.A. (Tablet Cloud), Agilize Tecnologia S.A. ("Agilize"), Trinks Servios de Internet S.A. ("Trinks"), Neostore Desenvolvimento de Programas de Computador S.A. ("Neomode"), Dental Office S.A. ("Dental Office"), APP Sistemas S.A. ("APP"), and Delivery Much Tecnologia S.A. ("Delivery Much") being entities on which we have a significant influence and minority interest in but do not consolidate. The term "Brazil" refers to the Federative Republic of Brazil and the phrase "Brazilian government" refers to the federal government of Brazil. "Central Bank" refers to the Brazilian Central Bank ( Banco Central do Brasil ). References in the annual report to "real," "reais" or "R$" refer to the Brazilian real, the official currency of Brazil and references to "U.S. dollar," "U.S. dollars" or "US$" refer to U.S. dollars, the official currency of the United States.

Financial Statements

Financial Statements We prepare our consolidated financial statements in accordance with the International Financial Reporting Standards, as issued by the International Accounting Standards Board ("IFRS"). We maintain our books and records in Brazilian reais. Unless otherwise noted, our financial information presented herein as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 is stated in reais, our functional and presentation currency. The financial information contained in this annual report includes our audited consolidated financial statements as of December 31, 2023 and 2022 and for each of the three years in the period ended December 31, 2023 together with the notes thereto. All references herein to "our financial statements" and "our audited consolidated financial statements" are to our consolidated financial statements. The financial information should be read in conjunction with "Item 5. Operating and Financial Review and Prospects" and our audited consolidated financial statements. Our fiscal year ends on December 31. References in this annual report to a fiscal year, such as "fiscal year 2023," relate to our fiscal year ended on December 31 of that calendar year. Financial Information in U.S. Dollars Solely for the convenience of the reader, we have translated some of the real amounts included in this annual report from reais into U.S. dollars. You should not construe these translations as representations by us that the amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated. Unless otherwise indicated, we have translated real amounts into U.S. dollars using a rate of R$4.8413 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2023 as reported by the Central Bank. See "—Selected financial data—Exchange Rates" for more detailed information regarding translation of reais into U.S. dollars and for historical exchange rates for the B

Selected financial data

Selected financial data You should read the following selected financial data together with "Item 5. Operating and Financial Review and Prospects" and our financial statements and the related notes appearing elsewhere in this annual report. The summary statement of profit or loss data and statement of financial position data as of December 31, 2023 and 2022 and for each of the three years ended December 31, 2023, 2022 and 2021 have been derived from our audited consolidated financial statements prepared in accordance with IFRS. For the Year Ended December 31, 2023 2023 2022 2021 (US$) (R$) (in millions, except amounts per share) Net revenue from transaction activities and other services 683.7 3,309.8 2,617.4 1,626.9 Net revenue from subscription services and equipment rental 377.0 1,825.0 1,760.9 1,071.9 Financial income 1,286.7 6,229.3 4,638.0 1,877.7 Other financial income 142.7 691.0 572.6 247.3 Total revenue and income 2,490.1 12,055.0 9,588.9 4,823.8 Cost of services (616.1) (2,982.8) (2,669.8) (1,713.8) Administrative expenses (245.6) (1,188.9) (1,121.4) (813.3) Selling expenses (350.8) (1,698.3) (1,511.2) (1,012.5) Financial expenses, net (826.1) (3,999.5) (3,514.7) (1,269.1) Mark-to-market on equity securities designated at FVPL 6.3 30.6 (853.1) (1,264.2) Other income (expenses), net (49.8) (241.2) (302.5) (185.9) Loss on investment in associates (0.9) (4.2) (3.6) (10.4) Profit (loss) before income taxes 407.1 1,970.8 (387.3) (1,445.6) Income tax and social contribution (76.5) (370.4) (139.1) 68.2 Net income (loss) attributable to: 330.6 1,600.4 (526.4) (1,377.3) Controlling shareholders 328.9 1,592.1 (519,4) (1.358,8) Non-controlling interests 1.7 8.4 (7.0) (18.5) Basic earnings (loss) per share (2) 1.05 5.09 (1.67) (4.40) Diluted earnings (loss) per share (2) 0.98 4.74 (1.67) (4.40) Other data: Adjusted net income (in millions) (3) 321.7 1,557.5 410.5 40.0 TPV (in billions) 84.3 408.3 367.4 275.4 Active clients (in thousa

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View this 20-F filing on SEC EDGAR